Capitalism, Issues

Obama and Google Take Aim At Universities in Patent Fight

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Proposed patent law changes prompt concern at universities

Proposed patent law changes could result in fewer partnerships between universities and tech startups, experts in academia warn.

Jessica Sebeok, associate vice president for policy at the Association of American Universities, believes universities will suffer unintended consequences if President Barack Obama succeeds in making it tougher for patent holders to defend their intellectual property.

House Resolution 9, a bill known as the Innovation Act that’s backed by Obama and tech giants including Google, Facebook and Verizon, “could have a chilling effect on university technology transfer,” Sebeok told Watchdog.org.

The measure would treat all non-practicing entities — a term for patent holders who aren’t actively using their patented technologies — as “patent trolls” out to game the system.

AAU members and other universities can partner with established companies or spin off tech start-ups to develop research patented under guidelines set by the 1980 Bayh-Dole Act, which allows patent protection for inventions made using federal funding.

Licensing patented technology to partner organizations “provides a mechanism for getting it out where it can be developed,” Sebeok said. Saddling universities with enforcement restrictions aimed at “patent trolls” could put a damper on that.

For university licensees and start-ups, patents are often the only collateral they can use to secure venture capital funding. If those patents were riskier to defend in court, many start-ups would never get off the ground.

“If companies think universities or their licensees aren’t willing to enforce their patents by filing infringement lawsuits when those lawsuits are necessary, they’re much more likely to infringe on those patents,” Sebeok said. “And investors are much less likely to invest in patented university discoveries and bring them to the public if they perceive them as weak patents that other companies can ignore.”

Business coalition United for Patent Reform – whose membership includes influential allies of the Obama Administration like Google, Amazon and General Motors – and other supporters of HR 9 seek to stop patent trolling by making it riskier to file patent obama-google-love-storyinfringement suits and imposing additional costs of plaintiffs, but AAU argues this would put undue pressure on legitimate patent holders.

“Non-practicing entities have been given a bad name,” she added, “but there are very good reasons for universities to be not practicing their patents. You don’t want universities to be in the business of creating products and services; what they’re good at is doing the research.”

This is a guest post by Jason Hart of watchdog.org. Read the rest of this post here.

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